Know-how allowances are capital allowances available to traders. Qualifying expenditure for know-how allowances is detailed in B3.615. Expenditure on know-how by companies on or after 1 April 2002 comes within the corporate intangible tax rules as set out in Division D1.6. Know-how allowances are writing-down allowances and are calculated in a similar way to those available for plant and machinery, see B3.332.
Calculating know-how allowances requires that qualifying expenditure is pooled1. There is a separate pool for each trade in respect of which the person has qualifying expenditure2.
A writing-down allowance is made for any chargeable period (other than the final chargeable period) for which a person has available qualifying expenditure ('AQE', see below) in excess of the total of any disposal values ('TDV', see below)3. The writing-down allowance is 25% of the excess4. It is proportionately reduced or increased if the period is less or more than a year, or the trade has
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